While most sale processes are stalled indefinitely as covid-19-related uncertainty continues to shake global financial markets, some sponsors are preparing their companies to hit the auction block when the turmoil settles down.
Representing one of those exceptions: Ares Management’s seven year-plus investment in Unified Women’s Healthcare, one of the countries largest providers of practice management services to OB/GYNs.
Bake-offs were held early this year – prior to global health crisis – with Moelis and Barclays said to have won the adviser mandate shortly before covid-19 spurred many cities to go on lockdown and sent U.S. stock markets into ferocious declines, sources said.
There is no set timing as to when a process will formally kick off, but sources suspect the second half of the year in the aftermath of coronavirus downturn.
Ares will likely bring the company to market when it feels it has full appreciation of the covid-19 impact on the company, and won’t be negatively impacted by headline risk, one source commented.
The company’s EBITDA lies north of $75 million, some of the people said, noting that it’s too early to speculate on a potential valuation given market uncertainty.
Despite the challenges facing companies, healthcare is widely considered recession resilient given that it is a fundamental human need and due to underlying macro drivers including an aging population. UWH’s positioning in the market is unlikely to change, one source noted, amid a growing focus on women’s health issues.
Consistent with precedent deal opportunities in women’s healthcare, the company is expected to garner significant attention from buyout funds when it becomes available.
Founded in 2009 as a single-specialty Management Services Organization, today Boca Raton, Florida, UWH is affiliated with more than 1,700 women’s healthcare providers across 12 states and the District of Columbia. The company cares for more than 2 million women annually, delivering 1 in every 40 births in the U.S., it said.
UWH provides non-clinical business services and support to affiliated practices, offering solutions and resources for operations advancement, practice growth, value transformation and innovation.
Funds managed by Ares Management bought UWH, formerly known as Unified Physician Management, in January 2013.
Ares, for its part, has deep roots in women’s healthcare investing.
The firm in July 2017 exited its investment in OB Hospitalist Group, the largest provider of obstetric hospitalist services in the U.S., via a sale to Gryphon Investors. Moelis and Jefferies offered sell-side advice on the deal.
The deal was valued at $625 million, sources familiar with the situation told PE Hub at the time.
Representatives of Ares and UWH didn’t return requests for comment. Moelis and Barclays declined to comment.
Action Item: Check out Ares latest Form ADV